Cable modem service in limboISP Channel's contract for Internet up in
the air

by Jennifer Kavanaugh

Last week's news that Internet provider ISP Channel will overhaul
its business leaves the question of future service uncertain for about
3,000 cable-modem users in the Palo Alto area in the coming months.

The ISP Channel's parent company, SoftNet Systems Inc., announced on
Friday that the high-speed Internet service was laying off a third of
its staff nationwide and restructuring the business to lower operating
costs and improve revenues.

SoftNet and ISP
officials said the changes won't affect customer service or technical
support. But as part of the restructuring, the ISP Channel is reexamining
its agreements with local contractors that wire the high-speed service
into homes and businesses. ISP's contract with AT&T Broadband ends in
April 2001, and the company said it doesn't know whether the contract
will be renewed.

"I wouldn't be able to predict that," said
Gloria Parrish, SoftNet's director of corporate communications.

SoftNet
said the ISP Channel, which typically contracts out maintenance and installation
to independent contractors, needs to adjust to a market that is reducing
the number of those contractors through buyouts and mergers.

The
announcement comes after three weeks of technical problems involving ISP
service in Palo Alto. During that time, customers experienced problems
getting access to the Internet or had abnormally slow connections. The
problems angered customers and led to disagreements over who was responsible
for the problems: the ISP Channel, AT&T or the Cable Co-op, which sold
the local cable system earlier this year.

Mark Heyer, the ISP
Channel's director of customer communications, said ISP and AT&T technicians
have been working together on the problems that have plagued the system
this month.

"We certainly intend to keep working with AT&T to
improve the service," Heyer said.

It's unclear at this point
if AT&T wants to renew its contract with the ISP Channel, or whether it
would bring its own Internet service or that of another company into its
system. When AT&T bought the system from Cable Co-op this year, it promised
to replace the older, coaxial cable system with fiber-optic lines within
three years. AT&T did not return phone calls for this story.

Some
ISP customers, frustrated with the problems they have had this month,
have called on the city of Palo Alto to open up its fiber-optic cable
loop to mainstream use, allowing private companies to lease space on the
system and compete for Palo Alto customers. City officials said they are
examining the economic feasibility of doing that, and a business plan
for the system is due out sometime next month.

Colin Mick, an
ISP Channel customer, said it wouldn't be the end of the world if the
ISP Channel service left Palo Alto, given the demand for Internet service
here.

"The service ISP provides is fairly transparent for most people," Mick
said. "If they go away, another service will come in."